Nothing much has changed since yesterday in Dollar index. In the short-term prices seem supported, but we do not see any major sign of strength. Trading above 80 is bullish, but bulls will also need to see an upward impulsive move unfold. 'Taper' talk will certainly bring volatility to the foreign exchange markets during the next two days, so we expect to receive signals that will determine trend.
Prices are trading above the lower triangle boundaries. Support is found at 79.90-80 and resistance is found at 80.55-65. The decline from 81.50 looks corrective, so we expect it is more probable that up trend will resume. Breaking out and above the triangle shown above, will give us 82.50 as target.
The daily chart has not given us any strong buy signal. Prices will need to break at least above 80.50 in order for bulls to challenge the 81-81.50 level where the strong daily resistance is. Rejection at these levels will mean that trend remains down and that we are heading towards 79 again. Concluding, 79.75 is important support and 80.50 important resistance. Anticipated increase in volatility due to FED taper talk is expected to break one of those price levels.
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